junction fabrics and apparels limited drhp.… · junction fabrics and apparels limited (formerly...

Draft Prospectus Dated: March 31, 2015

Please read Section 32 of the Companies Act, 2013

100 % Fixed Price Issue

JUNCTION FABRICS AND APPARELS LIMITED (Formerly known as Junction Fabrics and Apparels Private Limited)

Corporate Identity Number: - U18101TZ2011PLC017586

Our Company was incorporated as Junction Fabrics and Apparels Private Limited on November 15, 2011 under the provisions of Companies Act, 1956 with Registrar of Companies, Coimbatore, Tamil Nadu vide registration no. (CIN: U18101TZ2011PTC017586). Pursuant to Shareholders Resolution passed at the Extra Ordinary General Meeting held on March 05, 2015 our Company was converted into a Public Limited Company and the name of our Company was changed to “Junction Fabrics and Apparels Limited” vide a fresh Certificate of Incorporation dated March 24, 2015 issued by the Registrar of Companies, Coimbatore, Tamil Nadu. For details of the changes in our Name and Registered Office, please see section titled “History and Certain Corporate Matters” on page 108 of this Draft Prospectus.

Registered Office: No. 18(1) 24, Workshop Street, Khaderpet, Tirupur, Tamil Nadu – 641-601. Tel No: +91-0421-2200115, 2200359, 4336896 E-mail: [email protected] Website: www.junctionfabrics.in

Contact Person: Ms. Kiran Agarwal (Company Secretary & Compliance officer) PROMOTER OF OUR COMPANY: MR. PREM DINANATH AGGARWAL & MRS. SHIKHA AGGARWAL PREM

THE ISSUE

PUBLIC ISSUE OF 10,00,000 EQUITY SHARES OF FACE VALUE OF `̀̀̀ 10.00 EACH OF JUNCTION FABRICS AND APPARELS LIMITED (“OUR COMPANY” OR “THE ISSUER”) FOR CASH AT A PRICE OF `̀̀̀16.00 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `̀̀̀ 6.00 PER EQUITY SHARE) (“ISSUE PRICE”)

AGGREGATING TO `̀̀̀160.00 LAKHS (“THE ISSUE”), OF WHICH 56,000 EQUITY SHARES OF FACE VALUE OF `̀̀̀10.00 EACH FOR A CASH PRICE OF `̀̀̀ 16.00 PER EQUITY SHARE, AGGREGATING TO `̀̀̀ 8.96 LAKHS WILL BE RESERVED FOR SUBSCRIPTION BY MARKET MAKER (“MARKET MAKER RESERVATION PORTION”). THE ISSUE LESS THE MARKET MAKER RESERVATION PORTION I.E. ISSUE OF 9,44,000 EQUITY SHARES OF FACE VALUE OF `̀̀̀ 10.00 EACH AT AN ISSUE PRICE OF `̀̀̀ 16.00 PER EQUITY SHARE AGGREGATING TO `̀̀̀151.04 LAKHS (IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”). THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 37.14% AND 35.06%, RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY. FOR FURTHER DETAILS, PLEASE REFER TO SECTION TITLED "BASIC TERMS OF THE ISSUE" BEGINNING ON PAGE 61 OF THIS DRAFT PROSPECTUS.

THE FACE VALUE OF THE EQUITY SHARES IS `̀̀̀ 10.00 EACH AND THE ISSUE PRICE IS `̀̀̀16.00. THE ISSUE PRICE IS 1.60 TIMES OF THE FACE VALUE.

THIS ISSUE IS BEING MADE IN TERMS OF CHAPTER XB OF THE SEBI (ICDR) REGULATIONS, 2009, AS AMENDED. THIS ISSUE IS A FIXED PRICE ISSUE AND ALLOCATION IN THE NET ISSUE TO THE PUBLIC WILL BE MADE IN TERMS OF REGULATION 43(4) OF THE SEBI (ICDR) REGULATIONS, 2009, AS AMENDED. FOR FURTHER DETAILS, PLEASE REFER TO SECTION TITLED "ISSUE PROCEDURE" BEGINNING ON PAGE 216 OF THIS DRAFT PROSPECTUS.

Retail Individual Investors may participate in the Issue through an Application Supported by Blocked Amount ("ASBA") process providing details about the bank account which will be blocked by the Self Certified Syndicate Banks ("SCSBs"). However, investors other than Retail Individual Investors shall compulsorily participate through the ASBA process only providing details about the bank account which will be blocked by the SCSBs. In case of delay, in refund if any, our Company shall pay interest on the application money at the rate of 15% per annum for the period of delay. For further details, please refer to section titled "Issue Procedure" beginning on page 216 of this Draft Prospectus.

ELIGIBLE INVESTORS

For details in relation to Eligible Investors, please refer to section titled "Issue Procedure" beginning on page 216 of this Draft Prospectus.

RISK IN RELATION TO THE FIRST ISSUE

This being the first public issue of the Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares of the Company is `̀̀̀10.00 per equity share and the Issue Price is 1.60 times of the face value. The Issue Price (has been determined and justified by our Company in consultation with the Lead Manager as stated under the paragraph ‘Basis for Issue Price’ on page 62 of this Draft Prospectus) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS

Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the “Risk Factors” carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Prospectus. Specific attention of the investors is invited to the section titled ‘Risk Factors’ beginning on page 13 of this Draft Prospectus.

ISSUER’S ABSOLUTE RESPONSIBILITY

Our Company having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus contains all information with regard to our Company and this Issue, which is material in the context of this Issue, that the information contained in this Draft Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The Equity Shares offered through this Draft Prospectus are proposed to be listed on the SME Platform of BSE Limited (“BSE”). In terms of the Chapter XB of the SEBI (ICDR) Regulations, 2009, as amended, we are not required to obtain an in-principle listing approval for the shares being offered in this issue. However, our Company has received an in-principle approval letter dated [●] from BSE for using its name in this offer document for listing of our shares on the SME Platform of BSE. For the purpose of this Issue, the Designated Stock Exchange will be the BSE Limited.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

HEM SECURITIES LIMITED 203, Jaipur Tower, M I Road, Jaipur – 302001, Rajasthan, India. Tel. No.: +91- 141 – 4051000 Fax No.: +91- 141 – 5101757 Website: www.hemonline.com Email: [email protected]

Investor Grievance Email: [email protected] Contact Person: Ms. Yashika Gianchandani / Mr. Akun Goyal SEBI Regn. No. INM000010981

BIGSHARE SERVICES PRIVATE LIMITED E-2, Ansa Industrial Estate, Sakhivihar Road, Sakinaka, Andheri (East),Mumbai – 400 072, Maharashtra, India Tel. No.: +91-22 – 40430200

Fax No.: +91-22 – 28475201 Website: www.bigshareonline.com Email: [email protected] Contact Person: Mr. Ashok Shetty

SEBI Regn. No. MB/INR000001385

ISSUE PROGRAMME

ISSUE OPENS ON: [●] ISSUE CLOSES ON: [●]

Junction Fabrics and Apparels Limited

SECTION CONTENTS

I GENERAL

DEFINITIONS AND ABBREVIATIONS

CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION & MARKET DATA & CURRENCY OF FINANCIAL

FORWARD LOOKING STATEMENTS

II RISK FACTORS

III INTRODUCTION

SUMMARY OF OUR INDUSTRY

SUMMARY OF OUR BUSINESS

SUMMARY OF OUR FINANCIALS

THE ISSUE

GENERAL INFORMATION

CAPITAL STRUCTURE

OBJECTS OF THE ISSUE

BASIC TERMS OF ISSUE

BASIS FOR ISSUE PRICE

STATEMENT OF TAX BENEFITS

IV ABOUT THE ISSUER COMPANY

INDUSTRY OVERVIEW

OUR BUSINESS

KEY INDUSTRY REGULATIONS AND POLICIES

HISTORY AND CERTAIN CORPORATE MATTERS

OUR MANAGEMENT

OUR PROMOTER

OUR PROMOTER GROUP AND PROMOTER GROUP ENTITIES

DIVIDEND POLICY

V FINANCIAL INFORMATION OF THE COMPANY

AUDITOR’S REPORT ON STANDALONE RESTATED FINANCIAL STATEMENT

STATEMENT OF FINANCIAL INDEBTEDNESS

MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS & RESULTS OF OPERATIONS

VI LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

GOVERNMENT AND OTHER APPROVALS

OTHER REGULATORY AND STATUTORY DISCLOSURES

VII ISSUE RELATED INFORMATION

TERMS OF THE ISSUE

ISSUE STRUCTURE

ISSUE PROCEDURE

RESTRICTIONS ON FOREIGN

VIII MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

IX OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

DECLARATION


1

TABLE OF CONTENTS


CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION & MARKET DATA & CURRENCY OF FINANCIAL PRESENTATION


SUMMARY OF OUR INDUSTRY

SUMMARY OF OUR BUSINESS

SUMMARY OF OUR FINANCIALS

GENERAL INFORMATION

CAPITAL STRUCTURE

OBJECTS OF THE ISSUE

BASIC TERMS OF ISSUE

BASIS FOR ISSUE PRICE

STATEMENT OF TAX BENEFITS

ABOUT THE ISSUER COMPANY

INDUSTRY OVERVIEW

KEY INDUSTRY REGULATIONS AND POLICIES

HISTORY AND CERTAIN CORPORATE MATTERS

OUR MANAGEMENT

OUR PROMOTER GROUP AND PROMOTER GROUP ENTITIES

FINANCIAL INFORMATION OF THE COMPANY

AUDITOR’S REPORT ON STANDALONE RESTATED FINANCIAL STATEMENT

STATEMENT OF FINANCIAL INDEBTEDNESS

MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS & RESULTS OF OPERATIONS

LEGAL AND OTHER INFORMATION

LITIGATIONS AND MATERIAL DEVELOPMENTS

GOVERNMENT AND OTHER APPROVALS

OTHER REGULATORY AND STATUTORY DISCLOSURES

ISSUE RELATED INFORMATION

TERMS OF THE ISSUE

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

PAGE NO.

2

CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION & MARKET 10

12

13

29

32

34

38

39

45

56

61

62

65

73

83

97

108

111

125

128

133

AUDITOR’S REPORT ON STANDALONE RESTATED FINANCIAL STATEMENT 134

170

MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS & 174

186

191

195

209

214

216

238

240

268

269


DEFINITIONSGeneral Terms

Term

“Junction Fabrics And Apparels Limited”, “Junction”, “JFAL ”, “We” or “us” or “our Company” or “the Issuer’

Unless the context otherwise requires, refers to Limited,Companyof Corporation issued by the Registrar of Companies, Tamil Nadu, CoimbatoreJunction Fabrics And Apparels Private Limited.

“you”, “your” or “yours” Prospective investors in this Issue.

Company Related Terms

Terms

AOA / Articles / Articles of Association

Articles of Association of as Junction Fabrics And Apparels Private Limited)

Auditors/ Statutory Auditors The Thulasiraman,

Audit Committee The Committee of the Board of Directors constituted as the Company‘s Audit Committee in 52 of the SME Listing Agreement to be entered into with the BSE.

Board of Directors / the Board / our Board

The Board of Directors of constituted Committees thereof.

CIN Corporate Identification Number.

Companies Act / Act The Companies Act, 2013and amendments thereto. The Companies Act, 1956, to the extent of such of the provisions that are into force

Company Secretary & Compliance Officer

The Company Secretary & Compliance Officer of our Agarwal

Depositories Act The Depositories Act, 1996, as amended from time to time.

Depositories National Securities Depository Limited (NSDL) and Central (India) Limited (CDSL).

DIN Directors Identification Number.

Director(s) / our Directors The specified.

Equity Shares Equity Shares of specified in the context thereof.

Equity Shareholders Persons/ Entities holding Equity Shares of Our Company

Executive Directors Executive Directors are the Whole time Directors of our Company.

General Information Document (GID)

The Generalissued in accordance with SEBI 2013

GIR Number General Index Registry Number.

Group Companies The companies, firms and ventures disclosed in Promoter Group Entities”

whether such entities are covered under the Companies Act

HUF Hindu Undivided Family.

ISIN International Securities Identification Number.

IT Act The Income Tax Act,1961 as amended till date

Indian GAAP Generally Accepted Accounting Principles in India.

MOA / Memorandum / Memorandum of Association

Memorandum of Association of known as Junction Fabrics And Apparels Private Limited)time


2

SECTION I – GENERAL


Description

Unless the context otherwise requires, refers to Junction Fabrics And Apparels Limited, (Formerly known Junction Fabrics And Apparels Private Limited)Company originally incorporated under the Companies Act, 1956 vide a Certificate of Corporation issued by the Registrar of Companies, Tamil Nadu, CoimbatoreJunction Fabrics And Apparels Private Limited.

Prospective investors in this Issue.

Description

Articles of Association of Junction Fabrics And Apparels Limited (formerly known as Junction Fabrics And Apparels Private Limited), as amended from time to time.

The Statutory Auditors of Junction Fabrics And Apparels Limited being Balaji Thulasiraman, Chartered Accountants.

The Committee of the Board of Directors constituted as the Company‘s Audit Committee in accordance with Section 177 of the Companies Act, 2013 and Clause 52 of the SME Listing Agreement to be entered into with the BSE.

The Board of Directors of Junction Fabrics And Apparels Limitedconstituted Committees thereof.

Corporate Identification Number.

The Companies Act, 2013and amendments thereto. The Companies Act, 1956, to the extent of such of the provisions that are into force

The Company Secretary & Compliance Officer of our Company being MsAgarwal

The Depositories Act, 1996, as amended from time to time.

National Securities Depository Limited (NSDL) and Central (India) Limited (CDSL).

Directors Identification Number.

The Director(s) of Junction Fabrics And Apparels Limitedspecified.

Equity Shares of the Company of Face Value of `10/- specified in the context thereof.

Persons/ Entities holding Equity Shares of Our Company

Executive Directors are the Whole time Directors of our Company.

The General Information Document for investing in Public Issues prepared and issued in accordance with SEBI circular CIR/CFD/DIL/12/2013 dated October 23, 2013.

General Index Registry Number.

The companies, firms and ventures disclosed in “Our Promoter Group and Promoter Group Entities” on page 128 promoted by the Promoters, irrespective of whether such entities are covered under the Companies Act or not

Hindu Undivided Family.

International Securities Identification Number.

The Income Tax Act,1961 as amended till date

Generally Accepted Accounting Principles in India.

Memorandum of Association of Junction Fabrics And Apparels Limited (formerly known as Junction Fabrics And Apparels Private Limited) as amended from time to time

Junction Fabrics And Apparels (Formerly known Junction Fabrics And Apparels Private Limited) a

under the Companies Act, 1956 vide a Certificate of Corporation issued by the Registrar of Companies, Tamil Nadu, Coimbatore as

Junction Fabrics And Apparels Limited (formerly known , as amended from time to time.

Junction Fabrics And Apparels Limited being Balaji &

The Committee of the Board of Directors constituted as the Company‘s Audit accordance with Section 177 of the Companies Act, 2013 and Clause

52 of the SME Listing Agreement to be entered into with the BSE.

Junction Fabrics And Apparels Limited, including all duly

The Companies Act, 2013and amendments thereto. The Companies Act, 1956, to the

Company being Ms. Kiran

National Securities Depository Limited (NSDL) and Central Depository Services

Junction Fabrics And Apparels Limited, unless otherwise

each unless otherwise

Executive Directors are the Whole time Directors of our Company.

Information Document for investing in Public Issues prepared and circular CIR/CFD/DIL/12/2013 dated October 23,

“Our Promoter Group and

promoted by the Promoters, irrespective of or not.

Fabrics And Apparels Limited (formerly as amended from time to


Terms

Non Residents A person resident outside India, as defined under FEMA Regulations, 2000

NRIs / Non-Resident Indians A person residecitizen of India or a Person of Indian Origin under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.

Peer Review Auditor IndepRathi & Company

Person or Persons Any individual, sole proprietorship, unincorporated association, unincorporated organization, body corporate, Company, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires.

Promoter(s) Shall mean promoter of our Company i.e. Shikha Aggarwal Prem

Promoter Group The persons and entities constituting the promoter group pursuant to regulation 2(1) (zb) of the ICDR Regulations and disclosed in Companies / Entities

Registered Office of our Company

No. 18(1)24, Workshop Street, Khaderpet, Tirupur, Tami

Reserve Bank of India / RBI Reserve Bank of India constituted under the RBI Act.

RBI Act The

RoC Registrar of Companies,

SEBI Securities and Exchange Board of India constituted under the SEBI Act, 1992.

SEBI Act Securities and Exchange Board of India Act,

SEBI (ICDR) Regulations SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI on August 26, 2009, as amended, including instructions and clarifications issued by SEBI from time to time.

SEBI Takeover Regulations or SEBI (SAST) Regulations

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011, as amended from time to time.

SEBI (Venture Capital) Regulations

Securities Exchange Board of Ifrom time to time.

SEBI Insider Trading Regulations

The SEBI (Prohibition of Insider Trading) Regulations, instructions and clarifications issued by SEBI from time to time.

Sub- Account Sub-Regulations, 1995, other than subindividuals.

SICA Sick Industrial Companies (Special Provisions) Act, 1985.

Stock Exchange BSE Limited (SME Platform).

ISSUE RELATED TERMS

Terms

Allotment/Allot/Allotted Issue of the Equity Shares pursuant to the Issue to the successful applicants.

Allottee The successful applicant to whom the Equity Shares are

Applicant Any prospective investor who makes an application for Equity Shares in terms of thisDraft

Application Amount The amount at which the applicant makes an application for the Equity Shares of our Company in t

Application Form The Form in terms of which the applicant shall apply for the Equity Shares of the Company.

Application Supported by Block Amount (ASBA)

Means an application for subscribing to an issue containing an authorizationthe application money in a bank account.


3

Description

A person resident outside India, as defined under FEMA Regulations, 2000

A person resident outside India, as defined under FEMA Regulation and who is a citizen of India or a Person of Indian Origin under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.

Independent Auditor having a valid Peer Review certificate in our case Rathi & Company, Chartered Accountant.

Any individual, sole proprietorship, unincorporated association, unincorporated organization, body corporate, corporation, Company, partnership, limited liability Company, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires.

ll mean promoter of our Company i.e. Mr. Prem Dinanath Aggarwal andShikha Aggarwal Prem

The persons and entities constituting the promoter group pursuant to regulation 2(1) (zb) of the ICDR Regulations and disclosed in “Our PromoterCompanies / Entities “on page 128

No. 18(1)24, Workshop Street, Khaderpet, Tirupur, Tamil Nadu

Reserve Bank of India constituted under the RBI Act.

Reserve Bank of India Act, 1934 as amended from time to time.

Registrar of Companies, Tamil Nadu, Coimbatore.

Securities and Exchange Board of India constituted under the SEBI Act, 1992.

Securities and Exchange Board of India Act, 1992, as amended from time to time.

SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI on August 26, 2009, as amended, including instructions and clarifications issued by SEBI from time to time.

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011, as amended from time to time.

Securities Exchange Board of India (Venture Capital) Regulations, 1996 as amended from time to time.

The SEBI (Prohibition of Insider Trading) Regulations, 1992instructions and clarifications issued by SEBI from time to time.

- accounts registered with SEBI under the SEBI (Foreign Institutional Investor) Regulations, 1995, other than sub-accounts which are foreign corporate or foreign individuals.

Sick Industrial Companies (Special Provisions) Act, 1985.

BSE Limited (SME Platform).

Description

Issue of the Equity Shares pursuant to the Issue to the successful applicants.

The successful applicant to whom the Equity Shares are being / have been issued.

Any prospective investor who makes an application for Equity Shares in terms of thisDraft Prospectus.

The amount at which the applicant makes an application for the Equity Shares of our Company in terms of Draft Prospectus

The Form in terms of which the applicant shall apply for the Equity Shares of the Company.

Means an application for subscribing to an issue containing an authorizationthe application money in a bank account.

A person resident outside India, as defined under FEMA Regulations, 2000

nt outside India, as defined under FEMA Regulation and who is a citizen of India or a Person of Indian Origin under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations,

endent Auditor having a valid Peer Review certificate in our case being S.S.

Any individual, sole proprietorship, unincorporated association, unincorporated corporation, Company, partnership, limited liability

Company, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as

Mr. Prem Dinanath Aggarwal and Mrs.

The persons and entities constituting the promoter group pursuant to regulation 2(1) Our Promoter Group and Group

adu-641601, India.

Reserve Bank of India Act, 1934 as amended from time to time.

Securities and Exchange Board of India constituted under the SEBI Act, 1992.

1992, as amended from time to time.

SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI on August 26, 2009, as amended, including instructions and clarifications

Securities and Exchange Board of India (Substantial Acquisition of Shares and

ndia (Venture Capital) Regulations, 1996 as amended

1992 as amended, including instructions and clarifications issued by SEBI from time to time.

accounts registered with SEBI under the SEBI (Foreign Institutional Investor) accounts which are foreign corporate or foreign

Issue of the Equity Shares pursuant to the Issue to the successful applicants.

being / have been issued.

Any prospective investor who makes an application for Equity Shares in terms of this

The amount at which the applicant makes an application for the Equity Shares of our

The Form in terms of which the applicant shall apply for the Equity Shares of the

Means an application for subscribing to an issue containing an authorization to block


Terms

ASBA Account Account maintained by an ASBA Applicant with an SCSB which will be blocked by such SCSB to the extent of the Application Amount of the ASBA Applicant.

ASBA Applicant Any Applicant who

ASBA Application Form The form, whether physical or electronic, used by an ASBA Applicant to make an application, which will be considered as the application for Allotment for purposes of the Draft

Bankers to the Company Axis B

Bankers to the lssue / Escrow Collection Bank(s)

[●]

Basis of Allotment The basis on which the Equity Shares will be Allotted, described in Procedure

BSE BSE Limited.

Controlling Branches of the SCSBs

Such branches of the SCSBs which coordinate with the LM, the Registrar to the Issue and the Stock Exchange.

Depository / Depositories A depository registered with SEBI under theRegulations, 1996.

Depository Participant / DP A Depository Participant as defined under the Depositories Act, 1996.

Designated Branches Such branches of the SCSBs which shall collect the ASBA Application Form used byASBA Applicant and a list of which is available on http://www.sebi.gov.in/.

Designated Date The date on which funds are transferred from the Escrow Account(s) to the Public Issue Account or the Refund Account, as appropriate, and the amounts blocked by SCSBs are transferred from the bank accounts of the ASBA Applicant to the Public Issue Account, as the case may be, after the Prospectus is filed with the RoC, following which the Board of Directors shall Allot Equity Shares to the Allottees.

Designated Stock Exchange BSE Limited(SME Exchange)

DP ID Depository Participant’s Identity.

Draft Prospectus Draft Prospectus datedCompanies Act, 2013.

Eligible NRI A Non Resident Indian in a an offer or invitation under the Issue and in relation to whom this Prospectus will constitute an invitation to subscribe for the Equity Shares.

Escrow Account Account opened with the Escrow Coll(excluding the ASBA Applicant) will issue cheque or Demand Drafts in respect of the Application Amount when submitting an Application.

Escrow Agreement Agreement dated Registrar, the Escrow Collection Bank(s) for collection of the Application Amounts and for remitting refunds (if any) of the amounts collected to the Applicants (excluding the ASBA Applicants) on the terms and condit

Escrow Collection Bank(s) The Banks which are clearing members and registered with SEBI as Bankers to the Issue wherein the Escrow Account(s) of the Company will be opened.

HSL Hem Securities Limited.

IPO Initial Public Offering.

Issue/Issue size The Public Issue 10,00,000 Equity of premium of

Issue Closing Date [●] Issue Opening Date [●] Issue Price The Price at which the Equity Shares are being issued by our Company under this

Draft

LM/Lead Manager Lead Manager to the Issue, in this case being Hem Securities Limited

Listing Agreement The SME Equity Limited


4

Description

Account maintained by an ASBA Applicant with an SCSB which will be blocked by such SCSB to the extent of the Application Amount of the ASBA Applicant.

Any Applicant who intends to apply through ASBA.

The form, whether physical or electronic, used by an ASBA Applicant to make an application, which will be considered as the application for Allotment for purposes of

Draft Prospectus.

Axis Bank Ltd, No.: 3, Court Street, Tirupur, Tamil Nadu - 6416

The basis on which the Equity Shares will be Allotted, described in Procedure” on page 216 of the Draft Prospectus

BSE Limited.

Such branches of the SCSBs which coordinate with the LM, the Registrar to the Issue and the Stock Exchange.

A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996.

A Depository Participant as defined under the Depositories Act, 1996.

Such branches of the SCSBs which shall collect the ASBA Application Form used byASBA Applicant and a list of which is available on http://www.sebi.gov.in/.

The date on which funds are transferred from the Escrow Account(s) to the Public Issue Account or the Refund Account, as appropriate, and the amounts blocked by SCSBs are transferred from the bank accounts of the ASBA Applicant to the Public Issue Account, as the case may be, after the Prospectus is filed with the RoC, following which the Board of Directors shall Allot Equity Shares to the Allottees.

BSE Limited(SME Exchange)

Depository Participant’s Identity.

Draft Prospectus dated March 31th, 2015 issued in accordance with Section 32 of the Companies Act, 2013.

A Non Resident Indian in a jurisdiction outside India where it is not unlawful to make an offer or invitation under the Issue and in relation to whom this Prospectus will constitute an invitation to subscribe for the Equity Shares.

Account opened with the Escrow Collection Bank(s) and in whose favor the Applicant (excluding the ASBA Applicant) will issue cheque or Demand Drafts in respect of the Application Amount when submitting an Application.

Agreement dated [●] entered into amongst the Company, Lead Manager, the Registrar, the Escrow Collection Bank(s) for collection of the Application Amounts and for remitting refunds (if any) of the amounts collected to the Applicants (excluding the ASBA Applicants) on the terms and condition thereof.

The Banks which are clearing members and registered with SEBI as Bankers to the Issue wherein the Escrow Account(s) of the Company will be opened.

Hem Securities Limited.

Initial Public Offering.

The Public Issue 10,00,000 Equity of ` 10/- each at issue price of premium of ` 6/- per share aggregating to ` 160.00 Lacs)

The Price at which the Equity Shares are being issued by our Company under this Draft Prospectus being ` 16/- per equity share

Lead Manager to the Issue, in this case being Hem Securities Limited

The SME Equity Listing Agreement to be signed between our company and BSE Limited

Account maintained by an ASBA Applicant with an SCSB which will be blocked by such SCSB to the extent of the Application Amount of the ASBA Applicant.

The form, whether physical or electronic, used by an ASBA Applicant to make an application, which will be considered as the application for Allotment for purposes of

641601

The basis on which the Equity Shares will be Allotted, described in “Issue

Such branches of the SCSBs which coordinate with the LM, the Registrar to the Issue

SEBI (Depositories and Participant)

A Depository Participant as defined under the Depositories Act, 1996.

Such branches of the SCSBs which shall collect the ASBA Application Form used by ASBA Applicant and a list of which is available on http://www.sebi.gov.in/.

The date on which funds are transferred from the Escrow Account(s) to the Public Issue Account or the Refund Account, as appropriate, and the amounts blocked by the SCSBs are transferred from the bank accounts of the ASBA Applicant to the Public Issue Account, as the case may be, after the Prospectus is filed with the RoC, following which the Board of Directors shall Allot Equity Shares to the Allottees.

issued in accordance with Section 32 of the

jurisdiction outside India where it is not unlawful to make an offer or invitation under the Issue and in relation to whom this Prospectus will

ection Bank(s) and in whose favor the Applicant (excluding the ASBA Applicant) will issue cheque or Demand Drafts in respect of the

amongst the Company, Lead Manager, the Registrar, the Escrow Collection Bank(s) for collection of the Application Amounts and for remitting refunds (if any) of the amounts collected to the Applicants

ion thereof.

The Banks which are clearing members and registered with SEBI as Bankers to the Issue wherein the Escrow Account(s) of the Company will be opened.

each at issue price of ` 16/-(including a

The Price at which the Equity Shares are being issued by our Company under this

Lead Manager to the Issue, in this case being Hem Securities Limited (HSL).

Listing Agreement to be signed between our company and BSE


Terms

Market Maker Member Brokers of BSE who are specifically registered as Market Makers with the BSE SME Platform. In our case, Hem Securities Limited (Registration No. SMEMM0024801022013) is

Market Making Agreement The Market Making Agreement Market Maker(HSL)

Market Maker Reservation Portion

The reserved portion to be subscribed by Market Maker.

MOU/ Issue Agreement The Memorandum of Understanding and Lead Manager

Net Issue The Issue shares of face value at a price of of `

Non-Institutional Investors / Applicant

Investors other than Retail Individual Investors, NRIs and QIBs who apply for the Equity Shares of a value of more than

Other Investor Investor other than Retails Individual Investors.

OCB / Overseas Corporate Body

A Company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs, including overseas trust in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as definunder Foreign Exchange Management (Deposit) Regulations, 2000. OCB are not allowed to invest in this Issue.

Prospectus The Prospectus, filed with the RoC in accordance with the provisions of the Companies Act, 2013.

Public Issue /Issue / Issue Size Public Issue of And Apparels LimitedPrice

160.00

Public Issue Account Account opened with the Bankers to the Issue to receive monies from the Escrow Account(s) and from the SCSBs from the bank account of the ASBA Applicant, on the Designated Date.

Qualified Institutional Buyers / QIBs

A Mutual Fund, Venture Capital Fund and Foreign Venture Capital investor registered with the Board, a foreign institutional investor and subaccount which is a foreign corporate or foreign ina public financial institution as defined in Section 2(72) of the Companies Act, 2013; a scheduled commercial bank; a multilateral and bilateral development financial institution; a state industrial development corporaregistered with the Insurance Regulatory and Development Authority; a provident fund with minimum corpus of ` 25.00 Crore rupees; National Investment Fund set up by resolution 2/3/2005 the Gazette of India, the Union of India and insurance funds set up and managed by the Department ofPosts, India.

Refund Account Account opened with an Escrow Collection Bank from which the refunds of the whole or part of the Application Amount (excluding to the ASBA Applicants), if any, shall be made.

Refund Banker(s) The Bank(s) which are clearing member(s) and registered with the SEBI as Bankers to the Issue, at which the Refund Accounts will

Refunds through electronic transfer of funds

Refunds through electronic transfer of funds means refunds through ECSCredit or RTGS or NEFT or the ASBA process, as applicable.

Registrar/ Registrar to the Issue

Registrar to the Issue being


5

Description

Member Brokers of BSE who are specifically registered as Market Makers with the BSE SME Platform. In our case, Hem Securities Limited (Registration No. SMEMM0024801022013) is the sole Market Maker

The Market Making Agreement dated March 27th, 2015 betweenMarket Maker(HSL)

The reserved portion 56,000 Equity Shares of ` 10 each at an Issue price of to be subscribed by Market Maker.

The Memorandum of Understanding dated March 27th, 2015 and Lead Manager

The Issue (excluding the Market Maker Reservation Portion) shares of face value ` 10.00 each of Junction Fabrics And Apparels at a price of ` 16.00 per Equity Share (the “Issue Price”), including a share premium

6.00 per equity share aggregating up to ` 151.04 Lacs.

Investors other than Retail Individual Investors, NRIs and QIBs who apply for the Equity Shares of a value of more than ` 2,00,000/-

Investor other than Retails Individual Investors.

Company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs, including overseas trust in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as definunder Foreign Exchange Management (Deposit) Regulations, 2000. OCB are not allowed to invest in this Issue.

The Prospectus, filed with the RoC in accordance with the provisions of the Companies Act, 2013.

Public Issue of 10,00,000 equity shares of face value `10.00 each of And Apparels Limited for cash at a price of ` 16.00 per Equity Share (the "Price"), including a share premium of ` 6.00 per equity share aggregating up to 160.00 Lacs.

Account opened with the Bankers to the Issue to receive monies from the Escrow Account(s) and from the SCSBs from the bank account of the ASBA Applicant, on the Designated Date.

A Mutual Fund, Venture Capital Fund and Foreign Venture Capital investor registered with the Board, a foreign institutional investor and sub-account (other than a subaccount which is a foreign corporate or foreign individual), registered with the Board; a public financial institution as defined in Section 2(72) of the Companies Act, 2013; a scheduled commercial bank; a multilateral and bilateral development financial institution; a state industrial development corporation; an insurance company registered with the Insurance Regulatory and Development Authority; a provident fund with minimum corpus of ` 25.00 Crore; a pension fund with minimum corpus of

25.00 Crore rupees; National Investment Fund set up by resolution 2/3/2005 - DDII dated November 23, 2005 of the Government of India published in the Gazette of India, insurance funds set up and managed by army, navy or air force of the Union of India and insurance funds set up and managed by the Department ofPosts, India.

Account opened with an Escrow Collection Bank from which the refunds of the whole or part of the Application Amount (excluding to the ASBA Applicants), if any, shall be made.

The Bank(s) which are clearing member(s) and registered with the SEBI as Bankers to the Issue, at which the Refund Accounts will be opened.

Refunds through electronic transfer of funds means refunds through ECSCredit or RTGS or NEFT or the ASBA process, as applicable.

Registrar to the Issue being Bigshare Services Private Limited

Member Brokers of BSE who are specifically registered as Market Makers with the BSE SME Platform. In our case, Hem Securities Limited (Registration No.

between our company and

10 each at an Issue price of ` 16 Each

, 2015 between our company

(excluding the Market Maker Reservation Portion) of 9,44,000 equity Junction Fabrics And Apparels Limited for cash

”), including a share premium

Investors other than Retail Individual Investors, NRIs and QIBs who apply for the

Company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs, including overseas trust in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Deposit) Regulations, 2000. OCB are not

The Prospectus, filed with the RoC in accordance with the provisions of Section 32 of

10.00 each of Junction Fabrics per Equity Share (the "Issue

6.00 per equity share aggregating up to `

Account opened with the Bankers to the Issue to receive monies from the Escrow Account(s) and from the SCSBs from the bank account of the ASBA Applicant, on

A Mutual Fund, Venture Capital Fund and Foreign Venture Capital investor registered account (other than a sub-

dividual), registered with the Board; a public financial institution as defined in Section 2(72) of the Companies Act, 2013; a scheduled commercial bank; a multilateral and bilateral development financial

tion; an insurance company registered with the Insurance Regulatory and Development Authority; a provident

25.00 Crore; a pension fund with minimum corpus of 25.00 Crore rupees; National Investment Fund set up by resolution No. F. No.

DDII dated November 23, 2005 of the Government of India published in insurance funds set up and managed by army, navy or air force of

the Union of India and insurance funds set up and managed by the Department of

Account opened with an Escrow Collection Bank from which the refunds of the whole or part of the Application Amount (excluding to the ASBA Applicants), if any, shall

The Bank(s) which are clearing member(s) and registered with the SEBI as Bankers to

Refunds through electronic transfer of funds means refunds through ECS, Direct Credit or RTGS or NEFT or the ASBA process, as applicable.

Private Limited.


Terms

Regulations SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009 as from time to time.

Retail Individual Investors Individual investors (including HUFs, in the name of Karta and Eligible NRIs) who apply for the Equity Shares of a value of not more than

Registered Broker IndivSyndNSEinvestavailahttp:/

Self Certified Syndicate Bank(s) / SCSB(s)

Banks which are registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offer services of ASBA, including blocking of bank account, a list of which is available on

Underwriters The LM and The Market Maker who have underwritten this Issue pursuant to the provisions of the SEBI (ICDR) Regulations and the SEBI (Underwriters) Regulations, 1993, as amended from time to time.

Underwriting Agreement The our Company.

Working Day All days other than a Sunday or a public holiday (except during the Issue Period where a working day means all days other than a Saturday, Sunday or a public holiday), on wh

COMPANY AND INDUSTRY RELATED TERMS

Technical and Industry Related Terms

Terms

CSO Central Statistical

IIP Index of Industrial Production

Ktpa Kilo-Tonnes per Annum

Mtrs Meters

NCS National Chain Store

NTP 2000 National Textile Policy, 2000 issued by the Ministry of Textiles, GoI

Pcs Pieces

RTS Ready to Stitch

RTW Ready to Wear

Retail The word "Retail" appearing in the Draft Prospectus, or any other informationdocument regarding the Issue unless otherwise required is expresslydescribe that the term retail be read andJunction Fabrics And Wear” directly to ultimate consumers through its own Exclusive brand

Sq. Mtrs. Square Meters

TPA/tpa Tonnes Per Annum

TPM/tpm Tonnes per Month

WTO World Trade Organisation

ABBREVIATIONS

Abbreviation

AS / Accounting Standard

Accounting Standards as issued by the Institute of Chartered Accountants of India

A/c Account


6

Description

SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009 as from time to time.

Individual investors (including HUFs, in the name of Karta and Eligible NRIs) who apply for the Equity Shares of a value of not more than ` 2,00,000.

viduals or companies registered with SEBI as “Traddicate/Sub-Syndicate Members) who hold valid membe

NSE having right to trade in stocks listed on Stock Excstors can buy or sell securities listed on stock exchanges,

ailable on http://www.bseindia.com/members/MembershipDi://www.nseindia.com/membership/dynaContent/find a bro

Banks which are registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offer services of ASBA, including blocking of bank account, a list of which is available on http://www.sebi.gov.in

The LM and The Market Maker who have underwritten this Issue pursuant to the provisions of the SEBI (ICDR) Regulations and the SEBI (Underwriters) Regulations, 1993, as amended from time to time.

The Agreement dated March 27th, 2015 entered between the Underwriters (HSL) and our Company.

All days other than a Sunday or a public holiday (except during the Issue Period where a working day means all days other than a Saturday, Sunday or a public holiday), on which commercial banks in India are open for business.

COMPANY AND INDUSTRY RELATED TERMS

Technical and Industry Related Terms

Description

Central Statistical Organisation

Index of Industrial Production

Tonnes per Annum

National Chain Store

National Textile Policy, 2000 issued by the Ministry of Textiles, GoI

The word "Retail" appearing in the Draft Prospectus, or any other informationregarding the Issue unless otherwise required is expressly intended only to indicate and

describe that the term retail be read and understood as "The sale of readymade garments sold by Junction Fabrics And Apparels Limited under brands name "Monk", “Helicon

directly to ultimate consumers through its own Exclusive brand outlets."

Tonnes Per Annum

Tonnes per Month

World Trade Organisation

Full Form


SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009 as amended

Individual investors (including HUFs, in the name of Karta and Eligible NRIs) who 2,00,000.

ding Members” (except ership of either BSE or changes, through which , a list of which is Directory.aspx &

broker.htm

Banks which are registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offer services of ASBA, including blocking of bank account, a

The LM and The Market Maker who have underwritten this Issue pursuant to the provisions of the SEBI (ICDR) Regulations and the SEBI (Underwriters) Regulations,

between the Underwriters (HSL) and

All days other than a Sunday or a public holiday (except during the Issue Period where a working day means all days other than a Saturday, Sunday or a public

ich commercial banks in India are open for business.

The word "Retail" appearing in the Draft Prospectus, or any other information material or intended only to indicate and

understood as "The sale of readymade garments sold by Helicon” and “J Junction

outlets."



Abbreviation

AGM Annual General MeetingASBA Applications Supported by Blocked Amount

AMT Amount AIF Alternative Investment funds registered under the Securities and Exchange Board of India

(Alternative Investment Funds) Regulations, 2012, as amended. AY Assessment YearAOA Articles of AssociationB. A Bachelor of ArtsB. Com Bachelor of CommerceB. E Bachelor of EngineeringB. Sc Bachelor of ScienceB. Tech Bachelor of TechnologyBG/LC Bank Guarantee / Letter of CreditBSE Bombay Stock Exchange LimitedBIFR Board for Industrial and Financial ReconstructionCDSL Central Depository Services CAGR Compounded Annual Growth RateCAN Confirmation of Allocation NoteCA Chartered AccountantCB Controlling BranchCC Cash Credit CIN Corporate Identification NumberCIT Commissioner of Income TaxCS Company SecretaryCSO Central Statistical OrganisationCS. & CO Company Secretary & Compliance OfficerCST Central Sales TaxCWA/ICWA Cost and Works AccountantDIN Director Identification NumberDIPP Department of Industrial Policy and Promotion, Ministry of Commerce, DP Draft ProspectusDP ID Depository Participant’s Identification NumberEBITDA Earnings Before Interest Tax Depreciation & AmortisationECS Electronic Clearing SystemESIC Employee’s State Insurance CorporationEPS Earnings Per ShareEGM /EOGM Extraordinary General MeetingESOP Employee Stock Option PlanEXIM/ EXIM Policy

Export – Import Policy

FCNR Account Foreign Currency Non Resident AccountFIPB Foreign Investment Promotion BoardFY / Fiscal/Financial Year

Period of twelve months ended March 31 of that particular year, unless otherwise stated

FEMA Foreign Exchange Management Act, 1999, as amended from time to time, and the regulations framed there under

FCNR Account Foreign Currency Non Resident AccountFBT Fringe Benefit TaxFDI Foreign Direct InvestmentFIs Financial InstitutionsFIIs Foreign Institutional Investors (as defined under Foreign Exchange Management (Transfer or

Issue of Security by a Person Resident outside India) Regulations, 2000) registered under applicable laws in India


7

Full Form

Annual General Meeting

Applications Supported by Blocked Amount

Alternative Investment funds registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, as amended. Assessment Year Articles of Association Bachelor of Arts Bachelor of Commerce Bachelor of Engineering Bachelor of Science Bachelor of Technology Bank Guarantee / Letter of Credit Bombay Stock Exchange Limited Board for Industrial and Financial Reconstruction Central Depository Services (India) Limited Compounded Annual Growth Rate Confirmation of Allocation Note Chartered Accountant Controlling Branch

Corporate Identification Number Commissioner of Income Tax Company Secretary Central Statistical Organisation Company Secretary & Compliance Officer Central Sales Tax Cost and Works Accountant Director Identification Number Department of Industrial Policy and Promotion, Ministry of Commerce, Government of IndiaDraft Prospectus Depository Participant’s Identification Number Earnings Before Interest Tax Depreciation & Amortisation Electronic Clearing System Employee’s State Insurance Corporation

Share Extraordinary General Meeting Employee Stock Option Plan

Import Policy

Foreign Currency Non Resident Account Foreign Investment Promotion Board

twelve months ended March 31 of that particular year, unless otherwise stated

Foreign Exchange Management Act, 1999, as amended from time to time, and the regulations framed there under Foreign Currency Non Resident Account

Benefit Tax Foreign Direct Investment Financial Institutions Foreign Institutional Investors (as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000) registered under applicable laws in India

Alternative Investment funds registered under the Securities and Exchange Board of India

Government of India

twelve months ended March 31 of that particular year, unless otherwise stated

Foreign Exchange Management Act, 1999, as amended from time to time, and the regulations

Foreign Institutional Investors (as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000) registered with SEBI


Abbreviation

FPIs

“Foreign Portfolio Investor” means a person who satisfies the eligibility criteria prescribed under regulation 4 and has been registered under Chapter II of Securities And Exchange Board Of India (Foreign Porintermediary in terms of the provisions of the SEBI Act,1992

FTA Foreign Tourist ArrivalFVCI Foreign Venture Capital Investors registered with SEBI under the SEBI (Foreign Venture

Capital Investor) Regulations, 2000.FV Face Value GoI/Government Government of IndiaGDP Gross Domestic ProductHUF Hindu Undivided FamilyICAI The Institute of Chartered Accountants of IndiaICWAI The Institute of Cost Accountants of IndiaIMF International Monetary FundINR Indian National RupeeIIP Index of Industrial ProductionIPO Initial Public OfferICSI The Institute of Company Secretaries of IndiaIFRS International Financial Reporting StandardsHNI High Net Worth IndividualINR / `/ Rupees Indian Rupees, the legal currency of the Republic of IndiaI.T. Act Income Tax Act, 1961, as amended from time to timeIT Authorities Income Tax AuthoritiesIT Rules Income Tax Rules, 1962, as amended, except as stated otherwiseIRDA Insurance Regulatory and Development AuthorityKMP Key Managerial PersonnelLM Lead Manager Ltd. Limited MoF Ministry of Finance, Government of IndiaMOU Memorandum of Understanding M. A Master of Arts M. B. A Master of Business AdministrationM. Com Master of CommerceMn Million M. E Master of EngineeringM. Tech Masters of TechnologyMerchant Banker Merchant Banker as defined under the Securities and Exchange Board of India (Merchant

Bankers) Regulations, 1992MAPIN Market Participant and NA Not Applicable Networth The aggregate of paid up Share Capital and Share Premium account and Reserves and

Surplus(Excluding revaluation reserves) as reduced by aggregate of Miscellaneous Expenditure(to the extent not written off) and

NEFT National Electronic Fund TransferNECS National Electronic Clearing SystemNAV Net Asset Value NAV Net Asset Value NPV Net Present ValueNRIs Non Resident IndiansNRE Account Non Resident External Account NRO Account Non Resident Ordinary AccountNOC No Objection CertificateNSDL National Securities Depository LimitedOCB Overseas Corporate Bodies


8

Full Form

“Foreign Portfolio Investor” means a person who satisfies the eligibility criteria prescribed under regulation 4 and has been registered under Chapter II of Securities And Exchange Board Of India (Foreign Portfolio Investors) Regulations, 2014, which shall be deemed to be an intermediary in terms of the provisions of the SEBI Act,1992 Foreign Tourist Arrival Foreign Venture Capital Investors registered with SEBI under the SEBI (Foreign Venture

al Investor) Regulations, 2000.

Government of India Gross Domestic Product Hindu Undivided Family The Institute of Chartered Accountants of India The Institute of Cost Accountants of India International Monetary Fund Indian National Rupee Index of Industrial Production Initial Public Offer The Institute of Company Secretaries of India International Financial Reporting Standards High Net Worth Individual Indian Rupees, the legal currency of the Republic of India Income Tax Act, 1961, as amended from time to time Income Tax Authorities Income Tax Rules, 1962, as amended, except as stated otherwise Insurance Regulatory and Development Authority Key Managerial Personnel

Ministry of Finance, Government of India Memorandum of Understanding

Master of Business Administration Master of Commerce

Master of Engineering Masters of Technology Merchant Banker as defined under the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992 Market Participant and Investor Database

The aggregate of paid up Share Capital and Share Premium account and Reserves and Surplus(Excluding revaluation reserves) as reduced by aggregate of Miscellaneous Expenditure(to the extent not written off) and debit balance of Profit & Loss AccountNational Electronic Fund Transfer National Electronic Clearing System Net Asset Value Net Asset Value Net Present Value Non Resident Indians Non Resident External Account Non Resident Ordinary Account No Objection Certificate National Securities Depository Limited Overseas Corporate Bodies

“Foreign Portfolio Investor” means a person who satisfies the eligibility criteria prescribed under regulation 4 and has been registered under Chapter II of Securities And Exchange Board Of

tfolio Investors) Regulations, 2014, which shall be deemed to be an

Foreign Venture Capital Investors registered with SEBI under the SEBI (Foreign Venture

Merchant Banker as defined under the Securities and Exchange Board of India (Merchant

The aggregate of paid up Share Capital and Share Premium account and Reserves and Surplus(Excluding revaluation reserves) as reduced by aggregate of Miscellaneous

debit balance of Profit & Loss Account


Abbreviation

P.A. Per Annum PF Provident Fund PG Post Graduate PAC Persons Acting in P/E Ratio Price/Earnings RatioPAN Permanent Account NumberPAT Profit After Tax PBT Profit Before TaxPLI Postal Life InsurancePOA Power of AttorneyPSU Public Sector Undertaking(s)Pvt. Private RBI The Reserve Bank of IndiaROE Return on EquityR&D Research & DevelopmentRONW Return on Net WorthRTGS Real Time Gross SettlementINR Rupees, the official currency of the Republic of IndiaSCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to timeSME Small and Medium EnterprisesSCRA Securities Contract (Regulation) Act, 1956, as amended from time to timeSTT Securities Transaction TaxSec. Section SPV Special Purpose VehicleTAN Tax Deduction Account NumberTRS Transaction Registration SlipTIN Taxpayers Identification NumberUS/United States United States of AmericaUSD/ US$/ $ United States Dollar, the official currency of the Unites States of AmericaVCF / Venture Capital Fund

Foreign Venture Capital Funds (as defined under the Securities a(Venture Capital Funds) Regulations, 1996) registered with SEBI under applicable laws in India.

w.e.f. With effect from The words and expression used not defined in this Draft Prospectus will have the same meaning as assigned to such terms under the Companies Act, the securities and Exchange Board of India Act, 1992 (the Depositories Act and the rules and regulations made thereunder.


9

Full Form

Persons Acting in Concert Price/Earnings Ratio Permanent Account Number

Profit Before Tax Postal Life Insurance Power of Attorney Public Sector Undertaking(s)

The Reserve Bank of India on Equity

Research & Development Return on Net Worth Real Time Gross Settlement Rupees, the official currency of the Republic of India Securities Contracts (Regulation) Rules, 1957, as amended from time to time

Medium Enterprises Securities Contract (Regulation) Act, 1956, as amended from time to timeSecurities Transaction Tax

Special Purpose Vehicle Tax Deduction Account Number Transaction Registration Slip Taxpayers Identification Number United States of America United States Dollar, the official currency of the Unites States of AmericaForeign Venture Capital Funds (as defined under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996) registered with SEBI under applicable laws in India.With effect from

The words and expression used not defined in this Draft Prospectus will have the same meaning as assigned to such terms under the Companies Act, the securities and Exchange Board of India Act, 1992 (the “SEBI Act”

rules and regulations made thereunder.

Securities Contracts (Regulation) Rules, 1957, as amended from time to time

Securities Contract (Regulation) Act, 1956, as amended from time to time

United States Dollar, the official currency of the Unites States of America nd Exchange Board of India

(Venture Capital Funds) Regulations, 1996) registered with SEBI under applicable laws in India.

The words and expression used not defined in this Draft Prospectus will have the same meaning as assigned to such “SEBI Act”), the SCRA, the


CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references in the Draft Prospectus to “India” are to the Republic of India. All references in the “U.S.”, “USA” or “United States” are to the United States of America. In this Draft Prospectus, the terms “we”, “us”, “our”, the “Company”, “our Company”, “Limited”, “JFAL”, and “Junction”, unless the context otherwise indicates or implies, refers to Apparels Limited (Formerly known as the context otherwise requires, all references to one gender also refers to another gender and the word “Lac / Lakh” means “one hundred thousand”, the word “million (mn)” means “Ten Lac / Lakh”, the word “Crore” means “ten million” and the word “billion (bn)” means “one hundred crore”. In this total and the sum of the amounts listed are due to rounding

Use of Financial Data Unless stated otherwise, throughout this otherwise, the financial data in the Draft financial year ended 2012, 2013, 2014 Companies Act and SEBI (ICDR) Regulations, 2009 included under Section titled Company” beginning on page 134 of this financial information relating to us is presented on a year and ends on March 31st of every next year. There are significant differences between Indian GAAP and U.S. GAAP; accoGAAP financial statements included in this on the reader’s level of familiarity with Indian accounting practice and Indian GAAP. Any reliancefamiliar with Indian accounting practices on the financial disclosures presented in this accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. For additional definitions used in this Draft Draft Prospectus. In the section titled “Prospectus defined terms have the meaning given to such terms in the Articles of Association of our Company. Use of Industry & Market Data Unless stated otherwise, industry and market data and forecast used throughout the internal Company reports, data, websites, Industry publications report as well as Government Publications. Industry publication data and website data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Although, we believe industry and market data used in the verified by us or the LM or any of their affiliates or advisors. Similarly, internal Company reports and data, while believed by us to be reliable, have not been verified by any independent source. There are no standard data gathering methodologies in the industry in which we conduct our business and methodologies and assumptions may vary widely among different market and industry sources. In accordance with the SEBI (ICDR) Regulations, the section titled Prospectus includes information relating to our peer group companies. Such information has been derived from publicly


10

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA

FINANCIAL PRESENTATION

Prospectus to “India” are to the Republic of India. All references in the “U.S.”, “USA” or “United States” are to the United States of America.

Prospectus, the terms “we”, “us”, “our”, the “Company”, “our Company”, “Junction Fabrics And Apparels ”, unless the context otherwise indicates or implies, refers to

Limited (Formerly known as Junction Fabrics And Apparels Private Limited). In this the context otherwise requires, all references to one gender also refers to another gender and the word “Lac / Lakh” means “one hundred thousand”, the word “million (mn)” means “Ten Lac / Lakh”, the word “Crore” means “ten million”

he word “billion (bn)” means “one hundred crore”. In this Draft Prospectus, any discrepancies in any table between total and the sum of the amounts listed are due to rounding-off.

throughout this Draft Prospectus, all figures have been expressed in Lacs. Draft Prospectus is derived from our financial statements prepared and restated for the

and stub period ended December 31, 2014 in accordance withCompanies Act and SEBI (ICDR) Regulations, 2009 included under Section titled “Financial Information of the

of this Draft Prospectus. Our Company does not have a financial information relating to us is presented on a standalone basis. Our fiscal year commences on April 1 of every year and ends on March 31st of every next year.

There are significant differences between Indian GAAP and U.S. GAAP; accordingly, the degree to which the Indian GAAP financial statements included in this Draft Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practice and Indian GAAP. Any reliancefamiliar with Indian accounting practices on the financial disclosures presented in this Draft accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data

ded herein, and we urge you to consult your own advisors regarding such differences and their impact on our

Draft Prospectus, see the section Definitions and AbbreviationsProspectus. In the section titled “Main Provisions of Articles of Association”, on page no

Prospectus defined terms have the meaning given to such terms in the Articles of Association of our Company.

Unless stated otherwise, industry and market data and forecast used throughout the Draft Prospectus was obtained from internal Company reports, data, websites, Industry publications report as well as Government Publications. Industry

ebsite data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their

ough, we believe industry and market data used in the Draft Prospectus is reliable, it has not been independently verified by us or the LM or any of their affiliates or advisors. Similarly, internal Company reports and data, while

able, have not been verified by any independent source. There are no standard data gathering methodologies in the industry in which we conduct our business and methodologies and assumptions may vary widely among different market and industry sources.

In accordance with the SEBI (ICDR) Regulations, the section titled “Basis for Issue Price” Prospectus includes information relating to our peer group companies. Such information has been derived from publicly

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF

Prospectus to “India” are to the Republic of India. All references in the Draft Prospectus to the

Junction Fabrics And Apparels ”, unless the context otherwise indicates or implies, refers to Junction Fabrics And

Limited). In this Draft Prospectus, unless the context otherwise requires, all references to one gender also refers to another gender and the word “Lac / Lakh” means “one hundred thousand”, the word “million (mn)” means “Ten Lac / Lakh”, the word “Crore” means “ten million”

Prospectus, any discrepancies in any table between

ectus, all figures have been expressed in Lacs. Unless stated Prospectus is derived from our financial statements prepared and restated for the

in accordance with Indian GAAP, the Financial Information of the

Prospectus. Our Company does not have a subsidiary. Accordingly, basis. Our fiscal year commences on April 1 of every

rdingly, the degree to which the Indian Prospectus will provide meaningful information is entirely dependent

on the reader’s level of familiarity with Indian accounting practice and Indian GAAP. Any reliance by persons not Draft Prospectus should

accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data ded herein, and we urge you to consult your own advisors regarding such differences and their impact on our

Abbreviations on page 2 of this , on page no 240 of the Draft

Prospectus defined terms have the meaning given to such terms in the Articles of Association of our Company.

Prospectus was obtained from internal Company reports, data, websites, Industry publications report as well as Government Publications. Industry

ebsite data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their

Prospectus is reliable, it has not been independently verified by us or the LM or any of their affiliates or advisors. Similarly, internal Company reports and data, while

able, have not been verified by any independent source. There are no standard data gathering methodologies in the industry in which we conduct our business and methodologies and assumptions may vary widely

“Basis for Issue Price” on page 62 of the Draft Prospectus includes information relating to our peer group companies. Such information has been derived from publicly


available sources, and neither we, nor the LM, have independently verified such information.

Currency of Financial Presentation and Exchange Rates All references to "Rupees" or “INR" or “where specified, including in the section titled “been expressed in Lakhs/Lacs, Million and Crores. Any percentage amounts, as set forth in Financial Conditions and Results of Operation

indicated, have been calculated based on our restated respectively financial statement prepared in accordance with Indian GAAP. The Draft Prospectus contains conversions of certain US Dollar and other currency amounts into Indian Rupees that have been presented solely to comply with the requirements of the SEBI (ICDR) Regulations. These conversions should not be construed as a representation that those US Dollar or other currency amounts could have been, or can be converted into Indian Rupees, at any particular rate.


11

neither we, nor the LM, have independently verified such information.

Currency of Financial Presentation and Exchange Rates

All references to "Rupees" or “INR" or “`” are to Indian Rupees, the official currency of the Republic of India. Except specified, including in the section titled “Industry Overview” throughout the Draft Prospectus all figures have

been expressed in Lakhs/Lacs, Million and Crores.

Any percentage amounts, as set forth in "Risk Factors", "Our Business", "Management's DiscusFinancial Conditions and Results of Operation" on page 13, 83 & 174 in the Draft Prospectus, unless otherwise indicated, have been calculated based on our restated respectively financial statement prepared in accordance with Indian

Prospectus contains conversions of certain US Dollar and other currency amounts into Indian Rupees that have been presented solely to comply with the requirements of the SEBI (ICDR) Regulations. These conversions should not

a representation that those US Dollar or other currency amounts could have been, or can be converted into Indian Rupees, at any particular rate.

” are to Indian Rupees, the official currency of the Republic of India. Except Prospectus all figures have

"Management's Discussion and Analysis of

Prospectus, unless otherwise indicated, have been calculated based on our restated respectively financial statement prepared in accordance with Indian

Prospectus contains conversions of certain US Dollar and other currency amounts into Indian Rupees that have been presented solely to comply with the requirements of the SEBI (ICDR) Regulations. These conversions should not

a representation that those US Dollar or other currency amounts could have been, or can be converted



We have included statements in the Draft result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variatiexpressions, that are “forward-looking statements”. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forwareflect our current views with respect to future events and are not a guarantee of future performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on curreAlthough we believe the assumptions upon which these forwardthese assumptions could prove to be inaccurate, and the forwardincorrect. Important factors that could cause actual results to differ materially from our expectations include but are not limited to: 1. Disruption in our garment manufacturing facilities.2. General economic and business conditions in the markets in

economies; 3. Changes in laws and regulations relating to the industries in which we operate;4. Disruption in supply of Raw Materials.5. Increased in prices of Raw Material6. Occurrence of Environmental Probl7. Increased competition in industries/sector in which we operate;8. Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and

implement various projects and business plans for which 9. Our ability to meet our capital expenditure requirements;10. Fluctuations in operating costs; 11. Our ability to attract and retain qualified personnel;12. Changes in technology; 13. Changes in political and social conditions i

policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

14. Occurrence of natural disasters or ca15. Conflicts of interest with affiliated companies, the promoter group and other related parties; and16. The performance of the financial markets in India and globally; and17. Any adverse outcome in the legal proceedings in which we are involved.

For further discussion of factors that could cause our actual results to differ, see the SectioBusiness” & and "Management’s Dibeginning on page 13, 83 & 174 respectivelyonly estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimate Neither our Company, our Directors, our Officers, Lead Manager and Underwriter nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company, and the Lead Manager will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchange for the Equity Shares allotted pursuant to this Issue.


12


Draft Prospectus which contain words or phrases such as “will”, “aim”, “is likely to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variati

looking statements”.

All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Forwardreflect our current views with respect to future events and are not a guarantee of future performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could

Important factors that could cause actual results to differ materially from our expectations include but are not

manufacturing facilities. General economic and business conditions in the markets in which we operate and in the local, regional and national

Changes in laws and regulations relating to the industries in which we operate; Disruption in supply of Raw Materials. Increased in prices of Raw Material Occurrence of Environmental Problems & Uninsured Losses. Increased competition in industries/sector in which we operate; Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and implement various projects and business plans for which funds are being raised through this Issue;Our ability to meet our capital expenditure requirements;

Our ability to attract and retain qualified personnel;

Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or

Occurrence of natural disasters or calamities affecting the areas in which we have operations;Conflicts of interest with affiliated companies, the promoter group and other related parties; andThe performance of the financial markets in India and globally; and

al proceedings in which we are involved.

factors that could cause our actual results to differ, see the Section titled ent’s Discussion and Analysis of Financial Condition and

respectively of the Draft Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated.

Neither our Company, our Directors, our Officers, Lead Manager and Underwriter nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or

the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company, and the Lead Manager will ensure that investors in India are informed of

ime as the grant of listing and trading permission by the Stock Exchange for the Equity Shares allotted pursuant to this Issue.

s such as “will”, “aim”, “is likely to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such

All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results Forward-looking statements

reflect our current views with respect to future events and are not a guarantee of future performance. These statements ntly available information.

looking statements are based are reasonable, any of looking statements based on these assumptions could be

Important factors that could cause actual results to differ materially from our expectations include but are not

which we operate and in the local, regional and national

Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and funds are being raised through this Issue;

n India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or

lamities affecting the areas in which we have operations; Conflicts of interest with affiliated companies, the promoter group and other related parties; and

titled "Risk Factors", “Our Results of Operations”

Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains

Neither our Company, our Directors, our Officers, Lead Manager and Underwriter nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or

the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company, and the Lead Manager will ensure that investors in India are informed of

ime as the grant of listing and trading permission by the Stock Exchange for the


An investment in our Equity Shares involves a risk. Prospective investors should carefully consider all the information in

the Draft Prospectus, particularly the “Financial Statements of our Company”

and “Management’s Discussion and Analysis of Financial Condition

174 respectively of this Draft Prospectus and the risks and uncertainties described below, before making a

invest in our Equity Shares.

Any of the following risks, individually or together, could adversely affect our business, financial condition, results of

operations or prospects, which could result in a decline in the value of our Equity Shares and the loss of all or part of

your investment in our Equity Shares. While we have described the risks and uncertainties that our management believes

are material, these risks and uncertainties may not be the only risks and uncertainties we face. Additional risks and

uncertainties, including those we currently

business, results of operations, financial condition and prospects.

This Draft Prospectus contains forward

differ materially from those anticipated in these forward

considerations described below and elsewhere in this Draft Prospectus. The financial and other related implications of

risks concerned, wherever quantifiable, have been disclosed in the risk factors below. However, there are risk factors the

potential effects of which are not quantifiable and therefore no quantification has been provided with respect to such risk

factors. In making an investment decision, prospective investors must rely on their own examination of our Company and

the terms of the Issue, including the merits and the risks involved. You should not invest in this Issue unless you are

prepared to accept the risk of losing all or part of your investment, and you should consult your tax, financial and legal

advisors about the particular consequences to you of an investment in our Equity Shares.

Materiality

The Risk factors have been determined on the basis of their

determining the materiality.

1. Some events may not be material individually but may be found material collectively.

2. Some events may have material impact qualitatively instead of

3. Some events may not be material at present but may be having material impact in future.

Note:

The risk factors as envisaged by the management along with the proposals to address the risk if any. Unless specified or

quantified in the relevant risk factors below, we are not in a position to quantify the financial implication of any of the

risks described in this section.

In this Draft Prospectus, any discrepancies in any table between total and the sums of the amount listed are due to

rounding off. Any percentage amounts, as set forth in "

Analysis of Financial Condition and Results of Operations

indicated, has been calculated on the basis of the amount disclosed in the "Audited Financial Statements, as restated"

prepared in accordance with the Indian Accounting Standards

INTERNAL RISK

1. Our Company, Promoters and our Promoter Group 143(3) of the Income Tax Act, 1961 for various assessment years which may result into potential litigation

could have an impact on the business

Our Company, our Promoters and our Group Entities are involved in certain proceedingswhich if determined, against the above entities could have an impact on the business and financial Company. For details kindly refer chapter titled “


13

SECTION II: RISK FACTORS

An investment in our Equity Shares involves a risk. Prospective investors should carefully consider all the information in

“Financial Statements of our Company” and the related notes,

Discussion and Analysis of Financial Condition and Results of Operations

respectively of this Draft Prospectus and the risks and uncertainties described below, before making a

llowing risks, individually or together, could adversely affect our business, financial condition, results of

operations or prospects, which could result in a decline in the value of our Equity Shares and the loss of all or part of

quity Shares. While we have described the risks and uncertainties that our management believes

are material, these risks and uncertainties may not be the only risks and uncertainties we face. Additional risks and

uncertainties, including those we currently are not aware of or deem immaterial, may also have an adverse effect on our

business, results of operations, financial condition and prospects.

This Draft Prospectus contains forward-looking statements that involve risks and uncertainties. Our actual res

differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the

considerations described below and elsewhere in this Draft Prospectus. The financial and other related implications of

ks concerned, wherever quantifiable, have been disclosed

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